The first Fire phone, largely panned as a flop, cost Amazon $170 million in unsold inventory and other related costs in Q3, and VentureBeat's Mark Sullivan reports that the lukewarm reception forced the development team "back to the drawing board" for version two.

Although the first Fire phone had some interesting features, like 3-D effects and camera mode that can automatically identify real-world objects, they weren't enough to get the device off shelves. The development team, closely overseen by CEO Jeff Bezos, is reportedly trying hard to figure out what to put in the new phone to make it a success, even if that means missing next year's holiday season. When the phone first launched, it cost $199 with a two-year AT&T contract, but the company quickly slashed that price. It's now free on contract.